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Comcast-backed Atairos leads round; Shares of Groupon jump 9-plus percent
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The falling daily deals space has hit many companies really hard in recent years, but maybe none more so than Groupon. Such are the perils of being a public company: everyone can easily see how far you've fallen.
Don't count Groupon out just yet, though. It may have an exciting opportunity coming up soon, as it has struck up a potential partnership with Comcast.
The company announced a new $250 million investment from Atairos on Monday. Atairos was launched this year by Michael Angelakis, who used to be Vice Chairman and Chief Financial Officer of Comcast Corporation.
The company has more than $4 billion in committed capital, and is backed, by Comcast.
As per the deal, Atairos is purchasing $250 million in aggregate principal amount of 3.25% convertible senior notes due 2022 with an initial conversion price of approximately $5.40 per share. Also, Angelakis is joining the Board of Directors at Groupon.
Groupon, meanwhile, said it will use the proceeds for "general corporate purposes, including the repurchase of stock." It is also adding $200 million increase to its existing share repurchase program, and the company extended the program through April 2018.
Here's the exciting part about this investment: Comcast Corporation says it is going to try to find ways to partner with Groupon.
"Groupon is an established leader in connecting customers with local businesses,” Neil Smit, President and CEO of Comcast Cable, said in a statement. “The potential in combining Groupon's local expertise with Comcast's vast subscriber and advertiser network is something we look forward to closely exploring together."
No specifics of those potential partnerships were disclosed, so, right now we can only speculate. Groupon is trying to get away from the daily deals model and become a larger marketplace. Perhaps it, like Amazon before it, broaden out to include a video streaming site for Comcast-owned properties.
VatorNews has reached out to both Comcast and Groupon for more information, and we will update this story if we learn more.
Whatever happens, this will be a real shot in the arm for Groupon, which has struggled as daily deals have gone out of fashion.
The company went public at a $20 IPO price in October 2011, but has since lost 78.5 percent of its value since then. There is good news, though, and that is that investors are already encouraged by this news. The stock ended up 9.44 percent on Monday, and is now up 39.74 percent year-to-date.
(Image source: groupon.com)
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